More cuts at Michigan Operations

Published 7:00 pm, Tuesday, January 14, 2003

The numbers at The Dow Chemical Co.s Michigan Operations are shrinking again, as the company announced this morning that about 30 employees will be laid off by the end of the month.

More cuts will follow. By May, Dow expects to have cut a total of 125 union positions this year.

"It is a difficult decision for site leadership when employees and their families will be impacted. We are committed to trying to minimize the impact this will have on employees, their families and the community as we continue this process," said Gary Veurink, Dow vice president and Michigan Operations site leader.

Michigan Operations announced in July 2001 that it would work to become more globally competitive, with an eye toward being able to compete with other Dow plants for business. The sites age and safety record were particular concerns.

"For over two years, Michigan Operations has worked diligently to make the site more cost competitive to attract new business investment," Veurink said. "We have made a number of changes to reduce the sites costs; yet given the tough economic conditions of the company and the chemical industry, we still have too many employees on the site for the amount of work that needs to be done."

In addition to Michigan Operations challenges, Dow as a whole has been suffering financially, borrowing money to pay dividends to stockholders. Chairman Bill Stavropoulos, recently reinstalled as president and chief executive officer, has announced steps toward saving $1 billion in 2003.

An announcement from Michigan Operations said the layoffs will affect primarily lower-seniority employees, and that the company will be working with United Steelworkers of America Local 12075 leadership to discuss possible alternatives and options for affected employees, including potential ways to reduce the need for a layoff.

The key word for the union is "reduce." President Kent Holsing has been telling members for months there was potential for a layoff, and Friday afternoon he learned one was imminent.

"The union and the company are committed to working together," he said this morning, but he did not know whether layoffs could be avoided entirely. A service and incentive package the company has mentioned doesnt look much different from one offered in 2001, he said, and might draw only 20 interested people.

In addition, other cuts still are on union employees minds, as they try to lower costs to match outside bids or else face elimination.

"We still have several departments going through the outsourcing process," Holsing said. "Were looking at 60-plus jobs there that are in jeopardy."

Still, there might be feasible alternatives to the announced layoffs, he said. It might be possible for the union to deploy bargained-for employees for work that traditionally falls to salaried employees.

In addition, because there are fewer people on site, overtime has been consistently high, Holsing said  as high as 60 and 70 percent in some areas. The union might seek to have some employees pick up those hours rather than lose their positions.